Cadbury- Kraft

Presented By:
Kiran Rana – 08
Sudhir Hankar – 09
Sagar Vetal – 31
Komalkant Maski – 03
Cadbury
 British company started by Wealthy
Quaker John Cadbury in 1824
 Started as a shop selling chocolates
based drinks
 His sons took the business into the big
time building the Bournville development
some 45yrs later.
Cadbury
 Cadbury began making the milk chocolates in 1897 &
dairy milk in 1905.The company made its first major
takeover in 1921 buying rival Fry- another landmark soon
followed with production of its first filled egg product in
1923.

 As Quakers , the Cadbury family cared about the well-

being of its staff, setting new standards for working and
living conditions in Victorian Britain. By the mid-
1930s,more than 100 acres around the Bournville factory
were devoted to recreation.

 When Cadbury bought the drinks firm Schweppes in

1969 it became powerful force in the global food industry.
It sold its drink interest-now the Dr Pepper Snapple
company in 2008
Kraft Foods
 It started in 1903 with a capital $65
 Started as a wholesale cheese business in
Chicago
 Mr. Kraft was on the brink of revolutionizing food
manufacturing, not only in Chicago, but around
the world.
 1916, Kraft was granted a patent for what
became known as process cheese.
 In 1920, Kraft entered the Canadian market by
purchasing MacLaren’s Imperial Cheese Co. Ltd
 1945, the company name changed to Kraft
Foods
Kraft Foods
 2000, acquired Nabisco Holdings and combined
the two food giants to become Kraft Foods Inc.
 2001, Kraft stock began trading on the New York
Stock Exchange under the symbol “KFT.”
 2007, Kraft Foods Inc. became a fully
independent company
 2008, Kraft Foods Inc. (KFT) replaced American
International Group Inc. (AIG) in the Dow Jones
Industrial Average
Kraft and Cadbury: How they compare
 Kraft: the world's second-biggest confectionery
company will form part of the world's second-
largest food company.
 Kraft currently manufactures and supplies about
40 food brands across the world, ranging from
confectionery products such as Oreo biscuits and
Toblerone to Kenco coffee, Philadelphia cream
cheese and frozen pizza.
 Cadbury sells chocolate, sweets and chewing
gum around the world. Chocolate brands include
its signature Dairy Milk bar, as well as Trident
chewing gum and Halls cough sweets.
Kraft and Cadbury: How they compare

Although second only to Mars in the confectionery world,

Cadbury is dwarfed by Kraft, which brings in nearly five
times more in revenues and employees twice as many
people worldwide.
Kraft and Cadbury: Why Merger
 After the Second World War, Cadbury
joined with US drinks giant Schweppes in
the 1960s as it looked to expand overseas,
but the firms split in 2008
 Kraft has been touted as a possible buyer
for Cadbury ever since it demerged its US
soft drinks business in May last year,
leaving it vulnerable to a takeover.
 A month earlier, Cadbury lost its status as
global confectionery leader after Mars paid
$23bn for Wrigley's global business
Kraft and Cadbury: Why Merger
 As per Kraft CEO, Irene Rosenfeld, combination
of these two companies will increasingly
consolidation in the confectionery industry and
standalone Cadbury “has limited opportunities for
value creation”.
 Kraft would also benefit from Cadbury’s broad
geographical reach, in particular its strong
position in the developing Indian and Mexican
markets
 Cadbury would profit from Kraft’s extensive
distribution network in Russia, China and Brazil,
according to Rosenfeld
Kraft and Cadbury: Biding
 First Bid of £10.2bn ($16.7bn) on 7th Sep was
rejected unequivocally by Cadbury
 Initial offer seems undervalues to Cadbury
 Cadbury Said “Mars was paid 19.5 times
EBITDA for Wrigley in May 2008, and arguably
Cadbury has much more profit growth potential
than Wrigley had at that time.”
 This leads Kraft to go public with the bid in order
to “encourage and further” the process. Shares
of Cadbury soared 35 per cent at the start of
London trading on the news
 Kraft and Cadbury: Biding
 U.K. patriots are horrified at the thought of a huge
American corporation taking over a British institution
with a proud, independent 186-year history
 This difference is partly accounted for by variations in
local laws: In the U.K., milk chocolate must contain at
least 20 percent cocoa solids, while in the U.S. the
percentage can be as low as ten. Hershey's also says it
tailors its Cadbury recipes to American tastes for a
sweeter product. ."
 Chocolate fans are warning that Kraft's history of
making what they call "plastic cheese" spells doom for
Cadbury's iconic, rich, creamy Dairy Milk bars
Kraft and Cadbury: Biding
 Second Bid of £11.5bn ($19.5bn)
 Kraft Foods sealed a friendly deal to buy British candy
maker Cadbury for about $19.5 billion (11.5 billion
pounds) after frantic last-minute talks broke an impasse
over price.
 Kraft's sold its North American pizza business for
$3.7bn to Nestle earlier this month to help raise the
funds to pay for the Cadbury deal
 Deal will make world’s largest chocolate maker, 2nd
biggest gum producer
 Royal Bank of Scotland was prepared to lend money to
Kraft to fund the £11.5bn takeover bid
 The company has given no specific assurances over
the future of 4,500 UK jobs.
 Kraft and Cadbury: Biding
 Cadbury board has agreed to Kraft's improved offer of 840
pence ($13.78) per Cadbury share
 As per the revised offer Kraft would offer 2,000 pence in
cash and 0.7496 new shares for each Cadbury ADS
(American Depository Shares).
 A Kraft-Cadbury combination will create a portfolio with
more than 40 confectionery brands,each with annual sales
in excess of $100 million
 US food major Kraft Foods today said it required only 50
per cent support from Cadbury shareholders to take over
the British confectioner.
 British Prime Minister Gordon Brown pledged to "do
everything we can" to secure jobs at chocolate maker
Cadbury, the day after it accepted a takeover bid from US
giant Kraft Foods
Thank You !!!
Kraft and Cadbury: Biding
 Kraft Foods sealed a friendly deal to buy British
candy maker Cadbury for about $19.6 billion (11.5
billion pounds) after frantic last-minute talks broke
an impasse over price.
 Cadbury board has agreed to Kraft's improved
offer of 840 pence ($13.78) per Cadbury share
 As per the revised offer Kraft would offer 2,000
pence in cash and 0.7496 new shares for each
Cadbury ADS (American Depository Shares).